The Phoenix Symphony, once one week away from bankruptcy, defied the odds. The Detroit Symphony Orchestra, which endured a six-month strike by musicians, beat back defeat. The Minnesota Orchestra, forced to cancel its entire 2012-13 season, climbed out of its coffin.
These musical organizations represent three of the great comeback stories among contemporary U.S. orchestras. They faced and overcame financial challenges as potentially lethal as those now besetting the cash-strapped Baltimore Symphony Orchestra.
Years after their respective crises, all three ensembles proudly report several consecutive years of balanced budgets. They found creative ways to eliminate millions of dollars of debt, find new sources of revenue, cut costs and develop new audiences.
It hasn’t been easy. The structural problems bedeviling American symphonies have been kept at bay, not permanently vanquished. Profit margins are real, but slim. These leaders say that success in 2019 doesn’t guarantee that they’ll be solvent in 2020.
We’re still not out of the woods. It’s a knife fight every day.”
Jim Ward, president of the Phoenix Symphony
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“We’re still not out of the woods,” said Jim Ward, president of the Phoenix Symphony. “It’s a knife fight every day.”
But so far, at least, all three are figuring it out — raising the possibility that Baltimore can, too.
Since the beginning of the summer, Maryland residents have been involved in a passionate debate about the BSO’s future. The musicians have been locked out of Meyerhoff Symphony Hall since June 17. The audit for the fiscal year ending Aug. 31, 2018, concluded that the organization might not have sufficient financial resources to remain in business for another year.
Experts say the situation is dire but not hopeless.
“Having spent my career trying to fix troubled institutions, I know that every arts organization can be made healthy,” Michael Kaiser wrote in his 2015 book, “Curtains? The Future of the Arts in America.”
The specifics of each success story are unique to the cities in which they are located and can’t necessarily be replicated. But the overall approach to the problems besetting the orchestras was strikingly similar: Involve musicians in decision-making; use music to solve problems in your communities; make cuts if necessary but couple them with an expansive vision of the future in which everyone can invest.
“A lot of arts organizations who have gotten in trouble find themselves so worried about making money and balancing the budget that they stop dreaming," said Kaiser, a former president of the John F. Kennedy Center for the Performing Arts who has been described as “the turnaround king." He’s now chairman of the University of Maryland’s DeVos Institute of Arts Management.
“I have always believed that wherever you go, there’s revenue to be created but we’re bad at doing it,” Kaiser said. "We should be thinking about how to increase excitement instead of cutting costs.”
Below are the stories of how three orchestras found success.
The Phoenix Symphony
The organization was running annual deficits of $1.5 million. Public help would almost certainly not be forthcoming. (The Phoenix Symphony gets just 2 percent of its annual budget from state and local governments; the comparable statistic for the BSO last year was around 15 percent.) The musicians had been promised a 19 percent “snap-back” in the summer of 2011 to restore salary cuts imposed two years earlier. There was no money to pay them. A strike seemed imminent.
Jim Ward had never previously run a nonprofit of any kind, let alone a symphony, when he took over as interim president in 2010. But he had an impressive track record as an entertainment executive. Before retiring to Arizona, he had been president of LucasArts and senior vice-president of Lucasfilm, Ltd., where he’d been responsible for the business growth of the “Star Wars” and “Indiana Jones” franchises.
Ward determined that the organization’s $12 million budget had to be cut by about $3.5 million and persuaded the musicians to freeze their wages for an additional year to give him time to maneuver. The season was cut from 40 weeks to 38.
“I promised them that if they would take that leap of faith, they would become full partners in the Phoenix Symphony,” he said. “They would be on every board and every committee and they would educate me on how to run a symphony.”
Next, he re-focused the organization’s mission. Too many resources were allocated to a misplaced effort to build prestige, Ward said, and too few on positioning the organization to help solve the problems facing Phoenix.
“We pivoted the symphony to become an arts leader in the revitalization of Arizona,” Ward said.
The symphony began a program, now in 20 schools, called “Mind Over Music." Musicians provide instruction on everything from fundamentals of physics (by demonstrating pitch frequency, for example) to fundamentals of government for older students (by examining the way orchestras are structured.) Now, the symphony markets those lesson plans to schools nationwide.
The orchestra also became the first symphony in the nation to help conduct human research, Ward said. Symphony musicians are collaborating with Arizona State University to determine how music can ease the stress associated with Alzheimer’s Disease.
“These programs allowed us to gain credibility in the community,” Ward said. “We began to be perceived not just as people at Symphony Hall playing music that some people don’t listen to but as social workers affecting the community it in very positive ways.”
Ward decided it was important to demonstrate that the new programs were producing results. For instance, saliva testing is used in the Alzheimer’s disease project to measure the stress levels of patients, caregivers and musicians before and after each performance.
“This opened up pipelines to foundations we would never have had access to before," he said. “Now, I have quantitative data that I can lay on the table. They look at it and then they write me a check.”
During Ward’s tenure, he eliminated $3 million in debt in less than two years. Revenues have increased 71 percent. There’s been a 27 percent increase in concert attendance since he came on board; Symphony Hall on average is now 84 percent full during performances.
The Detroit Symphony Orchestra
The orchestra ran up a $3.8 million deficit in the 2008-09 fiscal year and faced a $6.5 million deficit the following year. City government was in no position to provide a bailout; within a few years, Detroit became the largest municipality in the U.S. to file for bankruptcy. During contract negotiations with the musicians, the symphony sought to impose a 30 percent pay cut. The performers refused to accept the cutbacks and went on strike for six months.
Phillip Wm. Fisher became chairman of the board the year after the strike ended. He immediately set about changing the way people within the organization treated one another.
”Culture trumps strategy and strategy trumps tactics,” he said. “We had to redefine who we were as an organization and where we were going. But we were only going to get there if everyone was rowing in the same direction.”
Board members began going backstage after performances to thank the musicians — a small gesture, but it had never been done before. Fisher doubled the number of players on orchestra committees and sought their advice.
The organization’s mission was also fine-tuned. Musicians, staff and board members decided they wanted their symphony to be “the most accessible orchestra on the planet,” Fisher said, and sought to develop programs aimed at achieving that goal.
In 2014, the DSO became —and remains — the only major symphony in the U.S. to live-stream every classical performance for free. The webcasts have been streamed by more than one million people from all 50 states and dozens of countries. The orchestra also has found funding to begin producing an offshoot of that venture, a series of educational webcasts made available for free to Michigan’s public schools.
In addition, when Detroit was in the midst of its financial upheaval, the board of directors realized that some longtime patrons didn’t feel safe venturing into the city at night. The orchestra started staging concerts in synagogues, churches and school auditoriums.
The result was a series of neighborhood concerts across geographic and income boundaries that have proven immensely popular; many are sold out or standing-room only. Next year, the program will expand into its eighth neighborhood.
”These programs helped us reach new audiences and find new sources of revenue,” said Erik Ronmark, the symphony’s vice-president and general manager.
The Detroit Symphony Orchestra has had six consecutive years of balanced budgets and the number of ticket buyers has increased by 66 percent since 2012. Nearly $100 million has been raised through the orchestra’s OneDSO Campaign, including $44.6 million for the endowment. In 2013, the orchestra played New York’s Carnegie Hall for the first time since 1996, and in 2017, embarked on a three-week tour of Japan and China.
The Minnesota Orchestra
The board of directors announced a $2.9 million deficit in 2011 and a $6 million deficit the following year. When the musicians refused to accept a contract that would have cut salaries for performers by about 30 percent, the players were locked out of Orchestra Hall for 16 months. A year’s worth of performances was cancelled.
An orchestra spokeswoman declined comment for this article. But according to a 2016 account in The New York Times, after the lockout ended in January 2014, with the musicians agreeing to a smaller pay cut than originally sought, they and their supporters were given a more prominent role in governing the organization and in making artistic decisions. The organization rebounded.
In a remarkable gesture, in late 2015 the musicians decided to donate to the orchestra $250,000 that remained in a fund that had been set up for them during the lockout.
That same year, the Minnesota Orchestra made headlines worldwide when it became the first American symphony to tour Cuba after the normalization of relations between the two nations. The initiative was the brainchild of Kevin Smith, then the orchestra’s president and CEO. He said he wanted to bring the two cultures together through music.
For the fourth consecutive season, the orchestra ended the 2018 fiscal year with a balanced budget. Total capacity for concerts in 2018 reached 91 percent — a five-year high. During those same four seasons, the orchestra increased attendance by more than 12 percent and earned revenue by nearly 25 percent, according to the orchestra’s website.